Every once in a while an opportunity with an upside comes along. As a developer, you have two angles. 1) Sell the client on your services. 2) Sell the client on your results.
The first approach is easy. Calculate how many hours you expect on a project, give a proposal, perform like a rockstar, be hailed as a hero… Before you get all excited and stop reading, opportunities with upswing usually mean projects with small budgets, meaning… get paid like a roadie.
The second option is more intriguing, but it’s also more difficult to recognize. Identifying the upside of a product offering, the conviction of a client, and your own ability to plug in takes attention. Ten years as a professional developer has put me in front of all kinds of [good] revenue share opportunities. I’ve overlooked most of them.
Since I’ve just confessed my partial blindness to spotting the right conditions for successful revenue share projects, I’ll focus on calling out some of the wrong ones. Here are three conditions that you should back away slowly from:
- opportunities that involve a friend
- opportunities that involve an after-hours client
- opportunities that require you to play outside of your core
Obvious, right? Wrong. These are scenarios that developers/agencies get tangled in all the time. Your friends will ask you to participate in their big ideas. Would-be entrepreneurs will try to keep an escape route (their full-time job) open, and merchants will confuse a revenue share with a sales commission (thus confusing you as a sales person.)
What you’re looking for is a client missing a facet. (Why does that make me think of The Dark Crystal?) Our most successful relationships are with clients that already had fully-engaged sales efforts in non-Internet channels. Their level of play off the web was built over time and the best way to roll their momentum directly online was to bring on a [web] ringer.
That’s not to say we haven’t flipped switches for clients with new products / without [existing] sales channels. We’ve seen dramatic results coming from clients taking ideas straight to the web.
But like I mentioned earlier, we’ve missed a lot of revenue share opportunities. And most of these clients in question would have been open to paying for results rather than services.
The spur for this and a few other recent posts is a simple question coming from an old friend planning a new business: “Have any advice [for a new service business]?” Whether or not I’m qualified to give it, I’m finding I do. I’m starting to wonder, though, if I’m not just posting things I need to work on personally.
4 Responses to “Getting paid for results, not services”
Two scenarios for you:
1. The designer of the Nike Swoosh was paid by the hour and made a total of $35.
2. The person who created the Jingle for the game show Jeopardy licensed the work and has made $70-80 million.
This is a tough question: how would you rather work?
Number 2! (Usually.)
Wow, that’s the first I’ve ever heard a reference to “The Dark Crystal”. Nice…
[...] This is a situation that sneaks up on you. One day you think you build websites, and the next, you realize you’re supporting systems that clients rely on to keep their business running. If you don’t have sufficient redundancy, this should make you very nervous. Redundancy belies small (in the bad sense) but doesn’t make you big (in the bad sense.) Redundancy means you can take on big clients. Redundancy means you can support revenue shares. Redundancy means you can go to Mexico for the week. Just make sure you’re plugging in monsters and not villagers. Redundancy does not mean you have someone at the office that can call your cell if there’s a problem. [...]